Gold Steady After $1,300 Peak; U.S.-China in Focus

15 May 2019

Gold Steady After $1,300 Peak; U.S.-China in Focus

By Barani Krishnan

Gold bugs await their next stab at $1,300, but the veil over the U.S.-China trade talks -- and where that could be headed -- has to be lifted first.

Bullion and futures of gold traded again in $1,300 territory on Wednesday after U.S. President Donald Trump dialed back some of his tough talk on negotiations with Beijing, saying he expected a "very fruitful meeting" with China's leader Xi Jinping at the G20 next month.

Unlike many assets, gold is in an unique position over the U.S.-China trade war. A positive development on that means bullion could benefit from more jewelry and other bullion-related consumption in China, while a negative outcome could bolster gold's standing as a safe-haven hedge against further weakening in Chinese growth.

Spot gold, reflective of trades in bullion, slid by 68 cents, or 0.7%, to $1,296.31 per ounce by 2:45 PM ET (18:45 GMT). Its session high was $1,300.93. Spot gold reached a one-month peak of $1,303.35 on Tuesday after China countered higher U.S. tariffs on its goods by announcing duty hikes of its own on American merchandise.

Gold futures for June delivery, traded on the Comex division of the New York Mercantile Exchange, settled up $1.50, or 0.1%, at $1,297.80 per ounce after touching a session high of $1,301.65. June gold soared to a one-month high $1,304.15 on Tuesday.

Wednesday's steady performance in gold came despite a rally in the stock market and U.S. dollar, both counter trades to the yellow metal.

On Wall Street, the Dow managed a triple-digit rise for a second day in a row. The dollar index, which measures the greenback against a basket of six currencies, rose by 0.1% to 97.37.

Gold has also been supported in recent days by geopolitical tensions in the Middle East associated to oil after Saudi Arabia reported drone and other attacks to its tankers and pipelines.

Elsewhere in metals, palladium climbed for a third day in a row to hold on to its mantle as the world's costliest traded metal.

Spot palladium was up $5.40, or 0.4%, at $1,344 an ounce. The silvery-white metal, used for purifying gasoline emissions, traded above $1,600 at one point in early March.

Trades in other Comex metals as of 2:45 PM ET (18:45 GMT):

Palladium futures up $5.25, or 0.4%, at $1,338.25 per ounce.

Platinum futures down $11.70, or 1.4%, at $847.40 per ounce.

Silver futures down 2 cents, or 0.1%, at $14.79 per ounce.

Copper futures up 2 cents, or 0.8%, at $2.75 per pound.

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